Covid-19 pushes Samsung Q1 profits to five-year low
Reduced demand for electronic devices brought about by the global Covid-19 pandemic, has pushed Samsung to register its lowest Q1 profits in five years.
As a direct result of the pandemic, Samsung said it expects operating profit for January to March to reach $5.23 billion. In itself, the figure is up almost 3% year on year, but remains lower than the three years prior to that.
Share prices in the company continue to fluctuate day to day but overall remain 10% lower than last year.
Samsung isn’t the first to warn of the economic fallout from Covid-19, but according to FT reports it is one of the first global tech giants to hint at Q1 financial results.
The likes of Microsoft and Apple were quick to sound profit warnings linked to their supply chains early in the pandemic, but both refrained from attaching specific figures to their predictions. However, Facebook and Google Cloud are expected to lose more than $44bn in ad revenue this year.
Meanwhile, after last month posting its weakest profit growth in three years, Huawei has warned that US sanctions could make 2020 ““the most difficult [year] for Huawei”.
As the world’s largest producer of computer chips and smartphones, Samsung could find a lifeline in 5G.
Last year, Samsung was one of 23 vendors that released 5G handsets, contributing three of the initial 33 handsets on the market when 5G launched. In March this year, Samsung won a deal to supply 5G radio equipment to Spark, formerly Telecom New Zealand.
Samsung is scheduled to release detailed financial results later this month.